Friday, 28 February 2020

Esprit downsizes, reduces losses in H1 2019-20

Esprit has been struggling in recent years and, while it is busy rationalizing its store network, it still has a great deal of work to do. In H1 of the 2019-20 financial year, closed on December 31, 2019, sales for the German fashion group based in Ratingen, near Düsseldorf, fell by 11.8% to HKD5.76 billion (€679.5 million

Yet, considering that in the period in question Esprit’s total retail area fell by 14.8%, the group’s revenue has actually improved in like-for-like terms.

Net losses in H1 2019-20 shrunk hugely, down to HKD331 million (€38.7 million), as opposed to the HKD1.773 billion (€207 million) loss recorded in the same period the previous financial year.

“Despite a troubled market situation, the group’s six-monthly performance was in line with our expectations. We have already made remarkable progress, having accomplished much in a short period of time,” said Esprit's CEO Anders Kristiansen.

Esprit’s worst losses were recorded in Asia. In Germany, the group’s leading market, where it still generates over a third of its sales, revenue fell by 12%, down to HKD2.05 billion (€239.6 million).

Esprit posted its best H1 performance in the wholesale channel in Germany, where sales fell by only 0.9% to HKD1.06 billion (€123.9 million).

The rest of Europe generated sales of about HKD1.7 billion (€198.6 million). In Asia, total H1 revenue was HKD356 million (€41.6 million). Esprit's e-tail site produced sales for about HKD1.61 billion (€189.2 million).

The group's board is optimistic about the prospects for the rest of the 2019-20 financial year. “We are satisfied with the direction of the group’s financial results. We are on the right track in implementing our strategic plan, encouraged by the progress made in H1. Esprit is on the way back to recovery,” said Kristiansen.

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